Dow Record Run Rolls On, Intel's M&A Boost, Nvidia and IBM CEOs Talk to CNBC 9/23/24

Carl Quintanilla (0:00)

Market moving insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street. Good Monday morning. welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen at Post 9 of the New York Stock Exchange. Cramer has the morning off. Pre-market is mixed. Coming off Friday's record Dow close, and back-to-back positive weeks for the NASDAQ. Lots of Fed speak in macro the next few days, including PCE, 10 year 376 A robot begins with a big week ahead for investors, 16 Fed speakers and a barrage of data, including GDP on deck.

David Faber (0:34)

Plus Intel shares are on the move a bit. This after qualcomm did approach the company about a potential takeover.

Sara Eisen (0:41)

And FTC Chair Lina Khan warning that a Kroger-Albertsons merger could increase grocery costs. We're going to break down what she had to say.

Carl Quintanilla (0:49)

Let's begin with the markets after a week, which saw some new record highs for stocks. Actually turning into a not bad September. We talked a lot about seasonal weakness coming into the month, but right now it is the best September since 2019

Sara Eisen (1:01)

Yeah, I guess not all Septembers include a double jumbo sized rate cut, which off to the races, especially if you compare that with the soft landing. And that is the outlook and what has propelled stocks. And so here's a good stat that I read over the weekend from Bank of America. On the day after the Fed cut, when equity markets were ripping, basically, equity trading flows saw the largest long only inflows into US equities in one and a half years at the open. And it was led by tech and consumer discretionary. So now one of the debates that's been forming is big tech or the rest of the market value, because valuations still look appealing. And if we do get this sort of best of scenario for the market where you get rate cuts on top of an economy that doesn't go into recession, is it finally time for the rest of the market, the value stocks to catch up? Or is it still just about Nvidia? You know, that's the it's an age old question, but the setup is different now with these rate cuts.

David Faber (2:04)

You know, it's it's a new environment. Well, every day is going to be we'll have to wait and see. I don't know what to tell you, Sara. See what we're going to get every day is about Nvidia, though we know that much no matter what.

Sara Eisen (2:15)

It is, but still macro, right? We're still guessing on the trajectory for the Fed. We'll get Friday, PCE. That's going to be, I think, the highlight of the week as far as data and could vindicate the Fed because we're looking for another sort of low, benign number. But now it's all about labor market because the Fed has now emphasized that they're more worried about the labor market than they are about inflation. So if we see more softness in the labor market, it could be a bigger market mover than, say, an inflation report.

Carl Quintanilla (2:41)

Yeah, people are starting to look at take three month averages on on the labor market, job growth. Right now, you're looking at 116 in Q2. It was 147 in Q1. It was 267 Morgan Stanley over the weekend said, if we get 100 or near 100K next week on Jobs Friday, X strikes, then you would be, in their words, watching Powell's forcefulness of not falling behind the curve come to the fore.

Sara Eisen (3:09)

You mean more 50s instead of more 25s.

Carl Quintanilla (3:11)

That's what they're implying, yeah.

Sara Eisen (3:12)

So the base case is two more 25s this year. And Powell made it clear that just because we went 50 doesn't mean we're going to go 50 at every other meeting. So that is going to depend on how much the labor market softens and weakens because they don't want to see any more. You know, Neel Kashkari, Minneapolis Fed president was on Squawk Box this morning. He's not a voter. He was in favor of 50 though, clearly, and more 50s. Here's what he says about the risk going forward.

Neel Kashkari (3:38)

Certainly, the risks have shifted. I look forward and I think, which risk am I more worried about right now? A surprising uptick in inflation or a surprising uptick in unemployment is the latter. At least it is for me. I think right now we still have a strong, healthy labor market, but I want to keep it a strong, healthy labor market. And a lot of the recent inflation data is coming in looking very positive that we're on our way back to 2 percent. So I don't think you're going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future.